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This paper examines the commercial loan decision process from the perspective of the individual loan officer. An analysis of this process concerns the relative effects of various criteria on the loan application and the degree to which tradeoffs are made among them by the loan officer. A basic theory of the process is first developed. The model is then empirically tested using a set of factorially designed combinations of these variables. This format avoids several of the problems previously encountered when the lending process has been empirically examined. The model not only exhibits a high degree of explanatory power but also permits important insights into this process.